The Goal – A Process of Ongoing Improvement

By Dr. Eli Goldratt

A new hero is winning the hearts and minds of American Managers. The hero’s name is Alex Rogo, and thousands of executives know of his struggle as plant manager to save the UniCo factory in the town of Bearington from being shut down.

Rogo’s fans can recount how the division manager, Bill Peach, drove up in his crimson Mercedes with the Number One license plate and gave Rogo an ultimatum: “Al, this is it: You’ve got three months to turn this plant around.”

They can tell you how marketing executive Johnny Jones, who sits behind a glass-and-chrome table and wears Gucci loafers and silk socks, leaned on Rogo to process the orders of his top customers first. They know about Hilton Smyth, the self-promoter whose temporary elevation over Rogo made it seem for a moment that all was lost.

Most of all, they can tell you about Jonah, the imperious physicist who helped Rogo discover and pursue the proper goal, which is making money, not saving it. Armed with new understanding, Rogo and his comrades circumvented the baleful scrutiny of financial officer Ethan Frost and his obsolete cost-accounting practices and executed a stunning turnaround. Rogo ultimately realised that the principles he had learned apply to more than just manufacturing. They are in fact the basis of a philosophy of ongoing improvement whereby change becomes the norm rather than the exception, and short-term gains are merely positive reinforcement to keep going and reap long-term benefits.

Alex Rogo is a fictional character from a most unusual book, The Goal that has sold over 2,000,000 copies world-wide. Many companies tell of dramatic results after key people have read and implemented its ideas. A year after executives at Modine Manufacturing Co. read the book, they reported that work-in-process inventory had fallen by 70 percent. Their average manufacturing lead-time – from raw material to shipment – dropped from 12.7 days to 3 days. Absenteeism plummeted by more than 20 percent.

Many readers say they read the 274-page book in one or two sittings, unable to put it down. “I felt I was the main character and the situations were ours,” wrote one vice president of manufacturing. The enthusiasm of some readers seems to know no bounds. One called it “the single most important literary work concerning business that has or may ever come along.” Yet even management professors wrote excited letters, and some planned to use it in their courses. Kodak and General Electric managers were among those ordering copies for key personnel, and some orders were in the hundreds.

With the help of the diagrams woven into the story-line, readers can understand the scientific reason all systems tend to fall further and further behind schedule: Slowness accumulates in a system, and there are ceilings on how much catching up can be done. The Goal demonstrates that there are two types of resources in an organisation, bottlenecks and non-bottlenecks, and that this fact has “vast implications.” Bottlenecks, importantly, are not good or bad, but simply resources, human or mechanical, whose capacity is less than or equal to the demand placed on them. The challenge is to identify and use bottlenecks to control the flow of product through the plant and into the market. A crucial principle: An hour lost at a bottleneck is an hour lost for the entire system; an hour saved at a non-bottleneck is a mirage.

The principal author of The Goal is Eliyahu M. Goldratt, an Israeli physicist and management consultant. Goldratt says Alex Rogo illustrates that what executives need most “is not brainpower, but the courage not to run away from the problems.”

One of the people who has read and praised The Goal was the grand old man of manufacturing, Dr. W. Edwards Deming.

Training and education in Theory of Contraints to get you off to a flying start

The majority of our clients choose us to help rapidly transform their business performance and get results that matter. Training and education form part of this process. Others simply want to try it for themselves and need a jump start without the arduous research.

We offer a number of training and education options to suit your needs, budget and timetable

Learning outcomes

How to improve system performance without additional cost

How to deliver on time without stress or additional costs

How to increase stock turns and reduce lead times

Shift thinking from local effciency to system effectiveness

Apply measures that focus on the goal of the system and reshape behaviours

Effective day to day decision making that moves you closer to the goal

Allocate resources to where they count

Techniques for thinking logically to achieve win -win solutions without need for compromise

Who should attend

Business owners, senior and middle managers and shop floor supervisors who seek business improvement and/or are engaged in the day to day running of the business.

The Goal, by Dr Eliyahu M.Goldratt is essential reading for anyone serious about business improvement and accelerates learning outcomes from the workshops and seminars.

Introductory sessions: 2 – 4hrs

The Goal Movie Session with Q&A sheets

ThroughputVelocity 3 hr day or evening interactive seminars. Featuring The Goal DVD, Case Study, Manufacturing and Service Operations Principles and your next steps

Supply chain competitiveness is recognised as critical to successful management of business yet few organisations have mastered how to simultaneously achieve low inventory investment (cost) and high customer service. Its usually boils down to low cost /low service or high cost /high service. Goldratt has introduced a rather daring and simple solution that defies common beliefs and practice and it works. Time after time companies are achieving lower inventory levels together with significantly improved service levels generating more profits and reducing costs.

Goldratt Insights Series (per subject) Operations, Projects, Distribution and measurement/Throughput Account ing. Dedicated workshops provide greater opportunity to work with your own business using real numbers to illustrate how the principles can be applied in your business.

Participants are introduced to a radical yet simple approach to project management that avoids the many causes of project failure. The program starts by first understanding the core problem that leads to projects failing 4 out of 5 times. Understanding the causes alone is not sufficient to deliver better outcomes but is important. A primary cause of project failure is the way we assign "safety" to project estimates. This safety is poorly managed and is shown to obstruct project completion. Through workshop simulation exercises we build a new set of rules for managing projects. For both single and multi-project environments particpants learn how to plan and execute projects in typically 2/3rds the normal time with less cost with full scope. The ones that do fail, fail by a very small margin when compared to current methods.

Manufacturing and Service Operations- Production the TOC Way - Simulation software and Work books supplied

Day to Day decision making and communication at Warp Speed. Work books supplied.

Every session provides sufficient material to implement a least one TOC principle in your work place to be able to witness a significant improvement in performance if the principles are implemented as taught. The longer duration session deliver greater content and therefore more improvement potential. Session fees are very affordable. Contact us for further information.

Education: purpose is to transfer a solid understanding of the basic principles of Theory of Constraints

Training: purpose to transfer the knowledge of the principles into functional and practical skills that can be applied on the job.

"Within 2 weeks of the workshop we halved work in progress enabling an extra $3,000 in throughput per day, every day" ...Simon Hay, Production Manager, Pacific Brands

"We still had some headaches but within weeks we were able to double our output out the door. We learned where to focus our efforts." ...Bruce McFarlane, Factory Manager, Hamilton Perry

"Work in progress reduced by more than 50% in a matter of days and has remained so ever since with improved on time performance"...Andrew McEwen, GM, Victor Hydraulics

“We budgeted for $2.5m in product cost reduction and by using the Critical Chain Project Management method we achieved more than $4.7m. That’s very satisfyng.”Mark O’Kane, General Manager Engineering, Electrolux Refrigeration.

We run public workshops on demand. Register your name and email address to indicate your preferences and receive news on when these workshops will be run.

Call 0418 207 362 to find out what would work best for you in your current situation. Contact Usfor our detailed information packs on each course.

Team Building, Thinking and Communication Skills at WARP SPEED

When you think of management and team effectiveness do you often wish it could be better? Do you want to lead your team to higher levels of performance, but are not sure how to start or make it happen?

Do you often find it is difficult to:

stop meetings going around in circles

get open collaboration and trust between people

get a new initiative off the ground and running successfully

get everyone aligned in dealing with issues and/or meeting company goals

What if you could achieve the following:

Meetings getting result done in one third of the time

Gain alignment to company goals - concensus on what is important

Have decision making that cuts to the chase - focussed on the bottom line

Defuse emotion and increase trust - everyone is on the same side

Rapidly overcome negative side effects of new initiatives

Rapidly identify and overcome obstacles to implementing new initiatives

If you could witness positive change in behaviour and achieve specific and measureable results after just a few days then having your team attend the Management Skills Workshop maybe your answer.

This workshop is specifically designed for effective communication in day to day (tactical) decision making. Using a selection of the Theory of Constraints Logical Thinking Tools particpants learn, practice and apply the tools to specific problem areas of of your business and gain almost immediate results.

Who should attend?

Business owners - who want to work on the business not in it

Senior managers and supervisors - responsible for identifying and resolving problems and implementing the changes

The MSW Program

3 x 2 day workshops with either 1 or 2 weeks gap to allow for real time practice of the tools learned.

"We gained an extra 38 units per day = $18,700 more in throughput" Decision made 24 hours before after more than 6 months tinkering with ideas. Brett, Senior Production Supervisor, Electrolux Orange NSW Australia

If you think that the Management Skills Workshop is for you and your team then we would be delighted to provide some further background information. Contact Us